Enterprise Group issued $100,000 of 3-year, 6% bonds on December31, 2025, for $106,000. Enterprise uses straight-line amortization. OnMay 1, 2026, $10,000 of the bonds were retired at 110. As a result ofthe retirement, Enterprise will report a:a. $400 loss(b.) $467 lossc. $1,100 lossd. $1,100 gain

On May 1st, 10% of bonds retired. Book vale of theses 10% bonds = $10,533Par value of bonds (10% of…

Enterprise Group issued $100,000 of 3-year, 6% bonds on December 31, 2025, for $106,000. Enterprise uses straight-line amortization. O May 1, 2026, $10,000 of the bonds were retired at 110. As a result o the retirement, Enterprise will report a: a. $400 loss b.) $467 loss c. $1,100 loss d. $1,100 gain

Enterprise Group issued $100,000 of 3-year, 6% bonds on December 31, 2025, for $106,000. Enterprise uses straight-line amortization. O May 1, 2026, $10,000 of the bonds were retired at 110. As a result o the retirement, Enterprise will report a: a. $400 loss b.) $467 loss c. $1,100 loss d. $1,100 gain

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On June 30, 2019, ABC acquired a non-interest bearing, 3-year, P6,000,000 face value serial bonds for P4,800,000. The principal is due every June 30. What is the interest income for the year 2020?With solution and good accounting form pls thank you!
On June 30, 2020, Kikiam Inc. had outstanding 8%, P3,000,000 face amount, 15-year bonds maturing on June 30, 2027. Interest is payable on June 30 and December 31. The unamortized balances of bond discount as of June 30, 2020 is P105,000. Kikiam re-acquired all its bonds at 94 on June 30, 2020 and retired them. Ignoring income taxes, how much is the gain should Kikiam report on this early extinguishment of debt? A. 45,000 B. 75,000 C. 180,000 D. 105,000
QUESTION 2 Presented below are two independent situations: i) Horton Company redeemed $400,000 face value, 12% bonds at 96 on July 31, 2021. The carrying value of the bonds on the retirement date was $428,500. The bonds pay annual interest and the interest payment due on July 31, 2021, has been made and recorded. ii) Ball Corporation retired $380,000 face value, 10% bonds on September 30, 2021, at 101. The carrying value of the bonds on the retirement date was $371,500. The bonds pay annual interest and the interest payment due on September 30, 2021 has been made and recorded.
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The 10% bonds payable of Crane Company had a carrying amount of $4060000 on December 31, 2020. The bonds, which had a face value of $3900000, were issued at a premium to yield 8%. Crane uses the effective-interest method of amortization. Interest is paid on June 30 and December 31. On June 30, 2021, several years before their maturity, Crane retired the bonds at 104 plus accrued interest. The loss on retirement, ignoring taxes, is $0. O $28600. O $46200. $156000.
Current Attempt in Progress On January 2, 2018, Crane Corporation, a small company that follows ASPE, issued $1.8 million of 10% bonds at 98 due on December 31, 2027. Legal and other costs of $180,000 were incurred in connection with the issue. Crane has a policy of capitalizing and amortizing the legal and other costs incurred by including them with the bond recorded at the date of issuance. Interest on the bonds is payable each December 31. The $180,000 of issuance costs are being deferred and amortized on a straight-line basis over the 10- year term of the bonds. The discount on the bonds is also being amortized on a straight-line basis over the 10 years. (The straight-line method is not materially different in its effect compared with the effective interest method.) The bonds are callable at 102 (that is, at 102% of their face amount), and on January 2, 2023, the company called a face amount of $1,000,000 of the bonds and retired them. (a) Ignoring income taxes, calculate the…
The December 31, 2021, statement of financial position of Bordeaux Corporation includes the following items: 9% bonds payable due December 31, 2028 P3,081,000 The bonds were issued on December 31, 2018, and have a face amount of P3,000,000 with interest payable semi-annually on July 1 and December 31 of each year. On January 1, 2022, Bordeaux retired P1,000,000 of these bonds at 98. What amount should Bordeaux report on the company’s 2022 income statement as gain or loss on the retirement of the bonds?
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A company purchased $100,000 of 5%, 2-year bonds on July 1, 2024. The bonds were purchased at face amount. What is the amount of interest revenue as of December 31, 2024? Multiple Choice A.$2,500 B.$5,000 C.$10,000 D.None of these answer choices are correct.
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